Best judgement assessment Section 121
Best judgement assessment Section 121: Finance Act, 2024 — Explanation regarding Important Amendments made in the Income Tax Ordinance, 2001
Important amendments made in Income Tax Ordinance, 2001 (“the Ordinance”) through Finance Act, 2024 are explained in the subsequent paragraphs.
Best judgement assessment Section 121
As per sub-section (1) of section 117, a person discontinuing business shall give a notice in writing to the Commissioner to that effect within fifteen days of the discontinuance. Sub-section (3) of section 117 authorizes the Commissioner to call for return of income where no notice has been given by the person to the Commissioner under sub-section (1).
In order to streamline the mechanism of assessment in cases where the person fails to file return in response to notice under sub-section (3) of section 117, a new clause (ac) has been inserted in sub-section (1) of section 121 enabling best judgment assessment in such cases.
A new sub section (I A) has been introduced in section 121 whereby the Commissioner may also make best judgment assessment on the basis of sectoral benchmark ratios. Through an explanation in this sub-section, sectoral benchmark have been defined similar to the definition in the explanation in sub-section AA) of section 177.
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